Insurance Industry Performance Slows in 2018
The insurance industry performance slowed in 2018 to record 3 per cent growth compared to 6.5 per cent in 2017. This is according to the Association of Kenya Insurers consolidated industry report for the year ending 31 December 2018.
“The industry braved a tough business environment in 2018 to post positive results. We are however upbeat about 2019 performance”, said Mr. Tom Gichuhi, AKI Executive Director, during the launch of the report.
The industry gross written premium grew to Ksh216.11 billion in 2018 from Ksh209.70 billion in 2017. Overall insurance penetration dropped to 2.43per cent in 2018 from 2.71 in 2017.
Non-Life (General) insurance accounted for 59.62 per cent of the total premium, while life insurance accounted for 40.38 per cent. Over the last five years (2014-2018), life insurance has grown by 53.45 per cent, while non-life has grown by 28.54 per cent during the same period.
“With the continued steady growth of life insurance, it is likely that in a few year’s life insurance will account for a bigger share of the gross written premiums. This will mirror the developed market trend where life insurance business has a bigger market share than non-life insurance,” noted Mr. Gichuhi.
Gross written premium for life insurance grew to Ksh87.26 billion from Ksh83.65 billion in 2017. Deposit administration (Pension) had the largest share at 38.12per cent followed by ordinary life at 30.49per cent. Group Life and Investment/Unit linked classes had 26.55per cent and 4.84per cent respectively.
Non-Life business gross written premium grew to Ksh128.85 billion from Ksh126.05 billion in 2017. Aviation insurance had the highest growth in 2018 at 19.29per cent followed by WIBA at 8.46per cent. Motor and medical insurance continue to be the main contributors of the non-life business.
Profits after tax dropped by 61.56per cent to Ksh3.54 billion down from Ksh9.21billion recorded in 2017. Net claims incurred dropped marginally to Ksh110.34billion from Ksh110.70 in 2017. Expenses and commissions increased by 1.18per cent in 2018 to Ksh69.35billion from Ksh68.54billion in 2017.